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How to decide on your Minimum Viable Product

Everything is in constant evolution. Technological innovations, globalization and new regulations are constantly destroying old monopolies and leveling the playing field for newcomers to enter your market. Standing still often means losing market share, and time to market is getting more and more critical for many projects. Still, very few projects get unlimited resources, even if they are of strategic importance. Most certainly, you will be facing constraints on timing, resources, budget or scope and you will need to make some difficult choices if you want to deliver on time. This is where a minimum viable product (MVP) comes into play.
 

An agile project methodology aims to break through some of the pitfalls of the classic waterfall project approach. All too often, a waterfall approach results in bad surprises and ultimately a delayed go-live or even a complete fail. Just because we thought we could predict the future and got it wrong in the end.

Taking an agile approach means embracing a certain degree of uncertainty (after all, we cannot control the environment or predict everything), while still moving forward and delivering a minimum viable or marketable product or service (MVP) within an acceptable time-to-market.

When should you go agile?

So, when is it a good idea to go agile? Ask yourself this: would you rather try to achieve 100% of your intended scope in order to please all of your internal and external stakeholders (and ask your CEO for a 6 months delay), or do you prefer to aim for a partial scope (perhaps even as little as 50% of your ultimate goal), and be out in the market sooner, collecting feedback from your target audience for further improvements while making money in the process.

If you prefer the second option, agile is the way to go.

MVP

Identifying the cost of delay

Before heading to the board room, ask yourself: “What is the cost of the delay I would be asking for?" If you can’t answer that question, there is no use in starting up the discussion.

The cost of delay could be situated on various levels, spanning multiple degrees of uncertainty: Is it the cost of missed sales revenue? Or the cost of maintaining a legacy manual process or software system? Is it an additional customer service cost? The cost of maintaining additional staffing to support some outdated process? Or is it a mix of all the above?

Make sure you understand which costs impact your organization the most. hold these costs up to the benefits of avoiding delays and binge out on the market to improve your service or product based on real-life experience and feedback. If you have a good idea of both scenarios, then you can consider embracing an agile approach and start scoping of your MVP.

How to scope your minimum viable product

The agile methodology is by nature a value-driven approach. The scope of your MVP should not be measured in the volume of features delivered from your wish list, but in the value those features bring to your main target audience and your company.

Before heading off into the board room to tell your CEO that you are planning to ignore the wish list from customer service, HR, the legal department and some of your most loyal clients, you better come prepared with specific data and compelling numbers to get a priority listing backed by management.

First, you need to identify your most valuable target segments. After that, you need to understand what matters most to these audience segments and which features will address these needs. With this in mind, you can start prioritizing and defining the scope of your sprints.

The scope of your MVP should not be measured in the volume of features delivered from your wish list, but in the value those features bring to your main target audience and your company.

When you do this, all your decisions should be driven by data and value. To define your segments, you need to dive into any data that is available to you (sales and purchase data, customer service data, online behavior, campaign data …).

You might come up with some surprising new insights. For example: it’s quite possible that only 20% of your existing client’s databases represents 80% of your potential growth.

With some luck, it may turn out you only need 60% of your anticipated scope to be able to provide a new service, which will double their recurring orders. Well done, your business case convinced the board! You now have the full decision power over your MVP, and can tell some of your internal stakeholders that they will just have to wait a bit longer with their feature list.

Identifying your Happy Flow

After defining your main segments, have a closer look at their user journeys and use cases. Just how similar or different are they? Let’s work out the “happy flow”. This is the “mother of all flows” that is adapted to the most impactful use case and aims to remove all possible overhead for our target audience.

Imagine you work for an insurance company and are creating a new customer sales funnel for a specific insurance policy. Let's say that today, you have a single “one size fits all” funnel to cover at least 5 completely different audiences. For example: you are presenting the same flow to singles, couples with children, couples without children, single parents and newly assembled families.

Guess what: after diving into the statistics, it turns out that over 80% of your database situates itself in only one use-case: singles. As a result, you have a huge drop-off rate in your current flow because you are asking for a lot of information that is irrelevant to a person who lives alone.

By making this flow contextual and adapted to each specific use-case, you could significantly simply the user experience, improve conversion rates and have a huge business impact. However, this is not easy to build, and it adds to the complexity and turnaround time of the project. This is where you head over to the drawing board and see how you can tackle this specific challenge through a MVP.

Simplifying product options and features

A good way to shape your MVP, is to look at your products and services and identify ways in which you can potentially simplify these. Allow us to explain:

Product and service features tend to grow organically over time. There could be legacy services from client portfolios owned by businesses your company acquired, for example. These product features could have complex business logic and restrictions attached to them that might not even be relevant to the way your company does business. For example: option B is only available to segment X if they have selected option A on the previous screen and cannot be combined with option C on this screen, and so on …

It might also be time to question and challenge the relevance of certain complex product offerings and business logic.

Since you have a clear view on the data, it might also be time to question and challenge the relevance of certain complex product offerings and business logic. They can only hold back the development of your MVP while possibly being redundant. Discuss this with management. Maybe you’ll get the approval to drop some product offerings (at least in a first phase) if the benefits and the simplified sales funnels lead to more overall sales. 

So there we are. Our MVP is stripped down once more to balance for the additional complexity of being more relevant and adapted to the context of our happy flow. Yes, we may no longer be addressing all use cases from our most valuable segment during the launch of our MVP. And we may not have all the product options we had in the old one-size-fits-all flow. But at least we are out the in the market in time and ahead of the competition.

Launching now and replacing the old one-size-fits-all funnel has a far higher impact than if we would have postponed our go live in order to add all the other use cases and product options. Now, we service 80% of the users who tend to look for this insurance policy. 

The essence of an agile MVP approach

An agile way of working is about embracing a certain degree of uncertainty and constantly re-evaluating your priorities. You'll be re-defining your MVP as you go and learn new things throughout the project. It is about challenging your company’s gut feelings and status quo, based on new insights and learnings from data, as well as from listening to your customers and prospects.

Re-defining priorities and sizing down on scope as you go to define an MVP, can be quite challenging. It requires a product owner with thorough understanding of the business impacts and ROI of project decisions and good communication and social skills. Still, as long as you are taking value-based decisions you should be able to get the buy-in you need. 

An MVP approach lets you balance out the cost of delay that you would have had while trying to do everything at once, versus the benefits of being in the market sooner and making money or providing value much faster for your most impactful segments and use cases with a simplified happy flow.

Work with the right partner

Unsure whether your project is a good fit for an agile MVP approach and if your company culture is ready for it? Are you missing a qualified product owner for your project? Not sure where to begin scoping your MVP and what your potential customers really want? Not getting the insights you need from your data?

Come talk to us, to see how we can help you out and achieve the best possible business impact for you.

 
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